Debris Removal

February 16, 2010

Ruben Almaguer

Acting Director Division of Emergency Management

Florida Division of Emergency Management

2555 Shumard Oak Boulevard

Tallahassee, Florida 32399-2100

Re:  Second Appeal–City of Delray Beach, PA ID 099-17100-00, Debris Removal

        FEMA-1545-DR-FL, Project Worksheets (PW) 187

Dear Mr. Almaguer:

This is in response to your letter dated February 13, 2009, which transmitted the referenced second appeal on behalf of the City of Delray Beach (Applicant).  The Applicant appealed the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $494,991 because its contractor did not account for a reduction in volume based on grinding of the debris.

Following Hurricane Frances, FEMA prepared PW 187 for the removal of disaster-related debris.  The Applicant signed a unit price contract and the contractor picked up approximately 204,549 cubic yards (CY) of eligible debris.  The contract contained a separate unit price for four phases of the debris removal operation: (1) pick up and haul to a temporary debris storage site, (2) manage temporary debris storage site, (3) grind debris at the temporary site, and (4) transfer the ground debris to the landfill.   Upon final review of PW 187, FEMA determined that the Applicant paid the contractor for transferring more debris to the landfill than the contractor actually transferred.  The contractor did not provide load tickets to document the volume of ground debris it transferred to the landfill.  It invoiced the Applicant for transferring the total 204,549 CY that it initially picked up and hauled to the temporary debris site.  FEMA debris guidance states that vegetative debris is typically reduced by a 4 to 1 ratio after grinding.  However, in this case FEMA used the Applicant’s reduction ratio of 2.33 to 1.  This resulted in a reduction of $494,991 in eligible funding.

The Applicant submitted its first appeal in a letter dated December 19, 2007, requesting that FEMA reinstate $494,991 because it utilized its standard procurement processes and awarded the contract to the lowest bidder.  In addition, the Applicant supplied a cost analysis to demonstrate that the cost charged by its contractor was fair and reasonable according to 44 CFR § 13.36(d)(3)(v).  In a letter dated May 27, 2008, the Regional Administrator denied the

Applicant’s first appeal because it was not reasonable and necessary to reimburse the Applicant for more debris than was actually hauled from the temporary debris storage site.  In addition, the Regional Administrator noted that the Applicant disputed this issue with its contractor before it submitted an appeal to FEMA.

In a letter dated February 13, 2009, the Florida Division of Emergency Management transmitted the Applicant’s second appeal to FEMA.  The Applicant states that it does not dispute that the contractor claimed cost for more debris that it actually hauled.  The Applicant reiterates its argument that the contract was awarded to the lowest bidder; therefore, its operations were cost effective and reasonable in accordance with 44 CFR § 13.36(d)(3)(v).  The Applicant noted that its costs were below projected costs based on FEMA approved cost codes. 

The Applicant’s contract stated that the Applicant would reimburse the contractor $4.00 for each cubic yard of ground debris it hauled from the temporary debris storage site to the landfill.  The contractor invoiced the Applicant for transferring the same volume of debris to the landfill as it pickup up before it was ground.  It is clear that the Applicant paid the contractor for work it did not perform.  Eligible cost must be reasonable and necessary to accomplish eligible work.  Cost of work that was not accomplished is not eligible for funding under the Public Assistance Program.  Based on a review of all information submitted with the appeal, I have determined that the Regional Administrator’s decision in the first appeal is consistent with Public Assistance regulations and policy.  Accordingly, I am denying the second appeal.

Please inform the Applicant of my decision.  My determination constitutes the final decision on this matter pursuant to 44 CFR §206.206, Appeals.

Sincerely,

/s/                                                                              

Elizabeth A. Zimmerman

Assistant Administrator

Disaster Assistance Directorate

cc:  Major Phil May
       Regional Administrator
       FEMA Region IV